Facebook’s cryptocurrency plans may hit an underwhelming end, soon

While Facebook and its parent, the Meta group, are no strangers to controversies and scrutiny, its cryptocurrency plans seemed too riddled with pushback from all quarters right from the start. Now, about two and a half years since being first announced, the company and its partners are reportedly considering packing up any plan to launch its own cryptocurrency.

A Bloomberg report on the matter stated that the Diem Association, of which about one-third is owned by Meta, is presently in talks with investment bankers to sell off its intellectual property assets to any interested party. The report does not detail if there has been any interest in acquiring whatever progress Diem had made towards launching its own cryptocurrency tokens, and states that it may even not get any buyer.

Announced in June 2019 under the name of Libra, the latter was Mark Zuckerberg’s play to enter the cryptocurrency market by building a “currency for the internet”. Libra was pegged as a stablecoin, which are cryptocurrencies that tie their valuation to some external, conventional market resource. In Libra’s case, Facebook and its partners had suggested a one-for-one backing against the US dollar.

The currency was not a decentralised one by nature, and was billed to be controlled by the Libra Association — a central bank of sorts to govern it. Right from the onset, the proposal raised multiple regulatory concerns all around the world. Regulators in France and USA thereafter questioned Facebook’s chief executive, Mark Zuckerberg, and opined that it may not be prudent to allow a consortium of global, for-profit corporations to have control on a currency that could be used widely around the world.

As regulatory actions poured in against the proposal of Libra, seven members of the initial Libra Association backed out of the project — including Ebay, Visa, Mastercard and PayPal. The association and its cryptocurrency was renamed to Diem in December 2020, as the body sought approval in USA.

Despite assurances from Zuckerberg that Facebook would not consider launching the currency anywhere in the world until regulatory concerns are addressed, the latter never occurred. Now, Diem is reportedly close to being sold, even as it continues to harbour members such as Spotify, Uber, Coinbase and Andreessen Horowitz within its association.